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Dispute persists over which hands empty tip jar

The Lowell Sun

Updated:
12/05/2013 10:41:17 AM EST

By Andy Metzger

State House News Service

BOSTON -- Arguing the threat of lawsuits stands between counter workers and the proverbial tip jar, Dunkin Donuts is pushing for a change to state law to let more of its employees share in the generosity of customers.

The ubiquitous, fast-service coffee, doughnut and bagel shop is at the forefront of a lobbying effort that may have legs, as Senate President Therese Murray has said the issue will be taken up in January.

The change has been opposed by AFL-CIO of Massachusetts President Steven Tolman, who believes employers should pay their higher-level service workers more so they don't need to share in the tips.

Sen. Michael Rodrigues, who about 10 years ago pushed through a ban on managers sharing in tips when he was in the House, has tried a few times since then to more precisely define "manager," and said it could emerge through a variety of different vehicles in 2014.

"It bothers me that hardworking people in these quick-service restaurants that are not paid a high wage are not able to supplement their wage with tips," said Rodrigues, who said the legislation could emerge through the committee process, in a mid-year spending bill or from the Senate Ways and Means Committee.

The ban on managers asking or demanding tips from tipped workers dates back to June 1952.

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In 2004, with Rodrigues's urging, the Legislature updated the law to also prohibit managers from receiving money from pooled tips, such as those collected at a coffee shop counter or affixed to a catering bill.

"We addressed a real important issue in what we thought was a real egregious act," Rodrigues told the News Service. At the time, the Westport Democrat was a state representative and co-chairman of the Committee on Labor and Workforce Development. He said, "What we did not do in that legislation is properly define what is management."

Dunkin Donuts Independent Franchise Owners Executive Director Ed Shanahan said it took a few years before the new law was put to use in expensive, class action lawsuits that he said interpreted managerial tasks such as opening a store for the day and cashing out a register make the employee a manager who is excluded from sharing in the tips.

"I'm coming in and opening up that door; by the court's definition that makes me a manager. And that's an example, an illustration of the real problem with just doing nothing," Shanahan told the News Service. He said employees who cash-out drawers and open stores "may be getting a quarter more; they may not be getting anything more," and said "true managers" take a salary and are banned from accepting tips and are ineligible from taking overtime pay.

The potential for costly litigation has led to a disappearance of the tip jars from some Dunkin Donuts counters, and supporters of the change said more clarity would likely lead to their return.

"The owners then say, 'The heck with it. Nobody's going to get tips.' So it doesn't harm the franchise owner; it doesn't harm the business owner; it hurts the little guy," said Sen. Brian Joyce, a Milton Democrat. "That's the thing that infuriates me. That people that purport to be helping the little guy are in fact seriously harming these very low wage workers."

Joyce said the Dunkin Donuts in his district have swapped out tip jars with charity drives for Children's Hospital.

Tolman has characterized the effort as a means to allow low wages to predominate in the fast food industry, as all manner of workers receive a bump in pay through the tip jar.

"He's a manager when we want him to be a manager, but he's not a manager when we don't want him to be a manager, and in particular let him share in the tips so I have a lesser responsibility," Tolman said.

Joyce said without a clear definition in law, a lawyer could argue that a head bartender who opens the bar for the evening, a restaurant hostess, or others with some authority over other workers was improperly receiving pooled tips. Joyce said small coffee shops are not yet "fat enough targets" to attract lawsuits, though they could be in the future.

Similar legislation passed both branches in the 2009-2010 session and was sent back with an amendment by Gov. Deval Patrick at the recommendation of Attorney General Martha Coakley, to narrow the definition of a manager, but the Legislature didn't re-enact the bill, Joyce said. Since then, an amendment with the more narrow definition fell 17-19 in the Senate last year, though Joyce said four of the senators who opposed it told him they would support the measure now.

Rodrigues said his legislation, which applies specifically to fast food restaurants, would rely on the definition of manager in the federal Fair Labor Standards Act. Shanahan claimed that when tips and pay scales over the minimum wage are factored in, Dunkin Donuts employees can make $13 to $15 per hour on a morning shift.

"It's not an issue in any other states to my knowledge," said Shanahan, who said there was a recent effort in Rhode Island to change the law, which would have "made this an issue." He said, "It's something we keep an eye open for."

The Senate in November passed a bill that would raise the minimum wage from $8 to $11 per hour by 2016 and tie future increases to inflation. Murray ruled out of order a Rodrigues pooled tips amendment to more precisely define "manager," and said the Senate would take up that issue in January.

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